CLI’s main regional fund pays $112 million for a newly finished Grade A logistics property in South Korea

CapitaLand Open End Real Estate Fund (COREF) COREF, the principal regional core-plus investment funds of CapitaLand Investment (CLI) 9CI -0.93%, has purchased a recently completed Grade Logistics property located in South Korea for $112 million.

The acquisition will boost COREF’s total funds under administration (FUM) to $1 billion.

SORA Condo enjoys an ideal position in a residential zone under URA guidelines.

The property, Anseong Seoungeun Logistics Centre, is comprised of two four-storey buildings that have basement floors. The property comprises 60,407 square meters of net leaseable space.

It is situated in the northern region of Anseong it is an emerging logistics hub within the Gyeonggi province. The area is believed to be well served by primary expressways, which provide convenient access for Seoul in addition to Greater Seoul. A brand-new expressway, scheduled to be completed in 2024, will provide an additional level of access and accessibility to the property.

“Leveraging our deal sourcing team’s deal sourcing and execution skills and a 20-year track record, we got this asset of high-quality for a fair price by an off-market transaction,” says Matthew Sohn the director for Korea at CLI. “We anticipate that the supply of logistics to be able to decrease in the near term due to rising construction costs as well as the challenges of financing projects and more stringent development restrictions. We think this asset is a good investment due to its strategic spot in the northern region of Anseong, a rapidly growing region that’s lured large logistics firms to establish bases and a number of global investment companies are looking to acquire logistics properties.”

“This acquisition is in addition to COREF’s existing portfolio of offices and multifamily properties across Japan, Singapore and Australia and broadens the portfolio towards the robust South Korean logistics sector,” says Simon Treacy, CEO of private equity real estate at CLI. “Demand for high-quality logistics facilities in South Korea is growing steadily due to the rapid growth of online commerce, which has led to the country being among the top e-commerce penetration rates in the world. The deal also aligns with COREF’s main areas of investment, which include investing in emerging submarkets within the fund’s targeted developed nations and the rising popularity of e-commerce.”

“Asia Pacific will continue to reap the benefits of rapid urbanisation as well as robust economic growth. Since the inception of COREF we have created an extensive portfolio of quality assets across four countries of Asia Pacific that offer investors appealing returns that are risk-adjusted. We will continue to draw on our teams’ in-country knowledge to increase the size of the private funds we manage,” Treacy continues.

Since its beginning at the end of September 2021 COREF is investing in asset across Australia, Japan and Singapore.